Buying a car is, possibly, one of the most important investments you can do. For this reason, there are multiple steps you should consider, before making your decision. We hope our guide to selecting the best used car will help you to accomplish that.

Establish a budget

When establishing a budget for buying a used car, it is important that you take into consideration the charges that come with insurance, registration, maintenance and running costs.

Do your research

After settling how much you can afford to spend, you can start doing your research. And it’s genuinely important that you allow yourself plenty of time to get acquainted with the prices on the market. For instance, if you want to convey the market’s price of a car that you have in mind, try looking on the Internet for various used car ads.

If you stumble across a car whose price is much lower than the market price, you should be wary – the car may not be as good as the owner claims it to be.

Select the car

As you’re in your quest for finding the ideal vehicle, we recommend that you read plenty of reviews for the car you wish to purchase. Plus, always consider checking whether the newest model of that car is soon to be released – this can help you to haggle on the price.

Contact the seller

Now this is when all the fun begins. When you finally found the car, and you think it’s right for you and your needs, you should contact the seller. Don’t be intimated to ask plenty of questions, you need to find out as much as possible about the vehicle so that you know what you’re paying for.

Consider asking about the amount of time the seller has had the car, the reason he/she is selling it, if it suffered any accidents or serious damage, its condition and whether it will meet an RWC or not. Also, pay attention to the seller’s reactions to the questions. Body language can also indicate whether he/she is reliable or not.

If you’re buying the car from a private seller, we recommend that you meet at his/her house. The seller’s personal information should coincide with the ones on the registration certificate.

Check the car’s record

Even though you might believe that the seller is reliable and honest, that doesn’t mean you should take his/her word for it. You need to make sure that the car isn’t stolen, or encumbered. For this reason, please consider getting its VIN and check the state in which it’s registered.

Verify the car thoroughly

Besides personally checking the car, you should consider having it checked by a mechanic. This move can help you save thousands of dollars and prevent you from making a bad investment.

We recommend that you verify the car in daylight so that you can have a good look at all its possible defects – signs of rust or previous accidents. Take a good look under the car, inside the car, and at the tires. It’s equally important to inspect the engine for any signs of leaks or exhaust fumes.

Our Chicago winter this year has been a lot less like a Midwest winter–the snow storms have been few and far between. A few weeks ago we finally got hammered by a storm that dumped 10 inches over the city. At the height of the snow storm I had to pick up my son from school. As I waited at a stop sign, the driver behind me bumped into my bumper.

Luckily, the damage wasn’t bad. When I took it to a repair shop for an estimate, they thought it would cost between $580 and $1,200 to fix depending on if there was any damage inside the bumper when they take it off to repair it.

Surprisingly, the woman who hit me decided she wanted to pay out of pocket rather than go through insurance. When I told her that the repair would take 2 to 3 days and we’d need a rental car during that time, she agreed to cover that cost, too.

This is the second time I’ve been rear-ended in 5 years, and both times the repairs were less than $2,000. Both times the drivers opted to pay out of pocket.

If you’re in a minor fender bender, should you pay out of pocket rather than going through insurance?

Reasons You May Want to Pay Out Of Pocket

1. If you have a high deductible. If you have a deductible of $1,000, for example, paying out of pocket if the repair is just a few hundred dollars over that amount may make sense. You’ll save yourself from an increasing premium.

2. If your insurance premium will increase substantially. Each insurance company is different, but rest assured that if you cause an accident and file a claim, your insurance will increase. Some insurers increase your premium by 10% and others by 20%. You may be able to call your insurer and ask how much the premium will go up before you decide to pay a claim or not.

3. If this is your second accident. While you’ll pay an increased premium for one accident, if you file two claims within a few years of one another, the increase is substantial. For instance, State Farm generally charges a 10% increase in premium for the first claim, but that amount increases to 45% for the second claim. While it may hurt your budget to come up with a thousand or two to pay out of pocket for the repairs, that may be the better option if you’re facing a substantial increase that could last several years.

4. If your insurance doesn’t have an accident forgiveness clause. Some insurers offer an accident forgiveness clause, meaning, if you’ve been with the company for a certain number of years (usually 5 to 9) with no accidents, the insurance company won’t increase your premium on the first accident you file. Again, though, you may want to save this benefit for a more substantial accident that you can’t afford to pay out of pocket rather than when the repair is relatively minor.

If you cause an accident, don’t automatically file a claim. There are benefits to paying out of pocket. You just need to understand your insurance policy as well as know exactly how much the repairs will cost before making a decision.

If you’ve caused an accident, did you pay out of pocket rather than filing a claim?

It’s been a couple of months since I last updated this series. You can go back and read the preceding 4 parts if you like. (part 1 | part 2 | part 3 | part 4) The basic summary is this. One of our cars blew it’s timing belt and royally messed up the inside of the engine. We decided to rebuild the engine, and amongst all that fun, we bought another car and were left with a third car that we really, really, didn’t need any longer. When I ended part 4, I enthusiastically wrote that we might soon be done with the whole fiasco. Boy was that wishful thinking. Here’s how it all wrapped up.

The folks that had looked at it and were excited about buying it couldn’t. Terrible credit would be my guess. (All the more reason to brush up on improving your credit score.) In any case, we never heard back from them. According to the research I’d done, the car was worth about $4100, and we had it listed at what we thought was a fair price of $3500. Not a premium, but what we thought was enough of a discount to make it attractive. Unfortunately, that wasn’t necessarily true.

We got plenty of calls by just parking the car in a well traffic-ed lot and even a few offers. The best of them was $2800. We just weren’t ready to let it go for that price. We owned the car, so we weren’t paying a dime to keep it, besides registration, and insurance. Registration is fixed, and the car was older. We’ve been around the insurance bit before and made sure to get a good insurance quote comparison. So, neither is very expensive. So we had the numbers on our side to hold on to it and not let it go for a ridiculous amount. The best, in a funny-ha-ha sense, offer we got was to trade the car for two snowmobiles. It probably wasn’t a terrible deal, but what am I going to do with two snowmobiles?

So, the car sat. And sat. And sat. For four months, it sat. And, to be completely honest, I was ready to get rid of it. It was just one more thing that was floating around out there that needed to be finished off. So, I expanded the net. I posted the car on a couple of free internet classifieds sites. A couple of weeks later, I got a couple of phone calls. And, some wheeling and dealing later, some folks came down and bought the car for their daughter in college.

We ended up taking $3000 for it. Much less than we would have liked, but our desire to get it off of our books overrode our desire to get that extra bit of money out of it. We could have probably held out for the larger amount and maybe gotten it if we had wanted to hold on to the car for a longer period of time. We were on the verge of a storage issue though. Whether we like it or not, it’s going to eventually snow, and then it would have to be moved from where it was parked and brought back home. Where we would have to move it as often as it snowed so that the plows could come through to plow the road. Inconvenient to say the least.

We’re glad to have it gone. We’ll use the money from it to pay off the loan we had to take to pay for the rebuilding of the engine on the other car. That’ll take care of that payment and get us back on track with our debt repayment. Even with our less than aggressive plan that we’ll be going back to, the numbers look good. We’ll be debt free with the exception of Mortgage and student loans sometime in 2013. Two years seems like a long time, but considering we started this journey over 5 years ago, it’s just a drop in the bucket.

Here’s to hoping that wraps up the car trouble for the immediate future!

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